Poly Medicure - medical disposable devices company
Printed From: The Equity Desk
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Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=3333
Printed Date: 21/Apr/2025 at 1:15am
Topic: Poly Medicure - medical disposable devices company
Posted By: ambore
Subject: Poly Medicure - medical disposable devices company
Date Posted: 20/Jul/2011 at 11:22pm
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Presenting some facts about the company that I gathered from Internet and portals like www.way2wealth.com and www.businessandeconomy.org. The valuable information that I personally I have on the company has been lost due to hard disk crash. Request you to go through and comment. I think it is a great company in one of the best industries. 50% of portfolio is invested in Poly Medicure. Hit Bhai and others, thank you for your inputs on Mayur Uniquoters.
Poly Medicure - the largest listed medical devices manufacturer in India. Company Background It recorded a gross profit margin of 51.31%, much higher than the average of the sector (22.59%). With a revenue per employee record of Rs.1.44 million in FY2009, Baid, MD of Poly Medicure, who is also one of the largest shareholder of his company (8.83% stake held directly and another 4.32% indirectly), dreams to take this owner-cum-management entity to newer highs. With forays into the Chinese and Egyptian market already, he has his eyes set on his next target – the mature American market! Today, more than 75% of revenues come from exports, and the company is exporting to 70 countries at present. Out of the total export, 40% of the revenues come from Europe, while 25% comes from Snapshot
Industry : Medical Devices
Recent Milestones
- Recently received a contract for supply of single Blood Bags for total consideration of INR 12.93 (Rupees Twelve Crore Ninety Three Lacs only) from Ministry of Health & Family Welfare, Department of AIDS Control, National AIDS Control Organization, Government of India through Rites Ltd.
- In its dispute over patents with B Braun Melsungen AG, the Rs 30,000-crore German medical technology giant, New Delhi-based manufacturer and supplier of medical devices firm, Poly Medicure, has won a patent case in the former’s home turf Germany
Industry The company operate purely in a medical device segment. The industry is approximately $2.5 billion, which includes every single device that can be “quoted” directly or indirectly as a “medical equipment”. Out of this, Polymed is mainly into products that are of one time usage in hospitals. This segment is roughly around Rs.30 billion in Generic Strategy - product differentiation & Cost Leadership The industry is very fragmented. There are only a few organized players and if you want to make a mark in such an atmosphere, then product differentiation is the only strategy to bank upon. And in that, Polymed particularly lays great emphasis on quality, so much so that 30% of our manpower is involved in quality checks. Polymed claims it is the only company in this business, which has an R&D approval from the Ministry of Science and Technology. It has filed for around 30 patents in the last 4-5 years. By 2014, the company plans to invest 3% of our revenues in R&D. At the same time, being an Indian company, the company by default, are relative cost leader. In other countries the manpower cost is around 30-35% of the total cost, for Polymed it is just 15%. So, it has a good potential to export high-quality products at reasonable prices Growth Strategies It’s a “three area” plan. The first would be to come up with more manufacturing facilities in The company is a very conservative company and our debt equity ratio is 1:2 Himanshu's view on debt - 'I don’t want to get into a debt trap. I don’t want to do something that Ranbaxy, Wockhardt and Dr. Reddy’s did. They acquired companies left right and centre and then they couldn’t handle the debt themselves! I would rather play safe and grow steadily; enough risks already taken at the start' Negatives · highly fragmented industry with so many small unorganized players · foreign exchange fluctuations and global economic downtrends impact the business due to the dependency on imports and exports · high dependency on hospitals and labs for sales and revenue · Lack of government regulation · shortage of critical manpower
· Focus on R & D and product differentiation · Increasing spending by government for health care
· As the economy and health insurance industry grows, the market size will grow · Target markets are spread over different countries/regions Financial Data
------------- Ramana Rao Ambore |
Replies:
Posted By: ambore
Date Posted: 24/Jul/2011 at 10:54pm
There is a report on Polymed in some other portal. Good to know they also preceive the management as ethical and dynamic. As a retial investor, I do n't have access to this kind of information, as I usually do not get to speak to the management. Hearing from somebody else on the same lines, reinforces your trust on the company. Let us seet how margins, expansion and entry into US market pan out.
Source: www.way2wealth.com ------------- Ramana Rao Ambore |
Posted By: Jaishrikrishna
Date Posted: 24/Jul/2011 at 11:53am
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This stock was recommended way back in April 2010 by somebody at around 100 - 110 Rs. Here is the link for the report http://www.scribd.com/doc/48322720/Poly-Medicure-Ltd-BSE-Code-531768-***-Capital-s-Street-Smart-Mid-Cap-Multibagger-Stock-Reco-for-Apr-10 - Click Here ------------- Don't Buy and Hold, Buy and Homework / Fish see the bait,but not the hook; Men see the profit, but not the peril. |
Posted By: ambore
Date Posted: 02/Aug/2011 at 11:26pm
Q2 results announced. Though operating profit is good, net profit is on the lower side due to additional tax burden.
------------- Ramana Rao Ambore |
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Posted By: hit2710
Date Posted: 02/Aug/2011 at 11:56pm
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The problem with polymedicure is that now higher tax rate seems to be eating into net margins. Situation looks quite similar to vinati organics and in both these cases, topline will continue to grow but bottom line will remain stagnant/suffer.
Polymedicure is slightly better placed than vinati bcos it has some products in the pipeline which will augment its margins. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: ambore
Date Posted: 08/Sep/2011 at 11:12pm
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I see a pattern in the price movement. The moment stock price hit Rs. 280 level, the volumes go up in the second half and price reaches Rs. 300 in no time. Looks like somebody is accumulating the shares. Hit bhai, any inputs? ------------- Ramana Rao Ambore |
Posted By: ambore
Date Posted: 29/Oct/2011 at 5:58pm
Sharing some interesting facts about Poly Medicure. ------------- Ramana Rao Ambore |
Posted By: mk1k
Date Posted: 05/Nov/2011 at 12:21pm
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Hi Ambore,
It has been very meticulous in your study of the company. Thanks for the same. Have been invested in this company for the past year and plan to add more if and when it dips |
Posted By: ambore
Date Posted: 05/Nov/2011 at 12:16pm
No, I am not planning to add any more share as the portfolio is skewed due to Poly Medicure over weightage. The priority is to add more PI and AVT which are currently part of the portfolio with overall weightage less than 1 %. I have been watching Polymed from 2009, and took the plunge I think in 2010. In one of the management discussions, think they have mentioned the revenues would be fully reflected in Q3 and Q4 quarters. So, I am expecting good topline growth, and possibly decent bottomline growth. Let us keep our fingers crossed. ------------- Ramana Rao Ambore |
Posted By: ambore
Date Posted: 05/Nov/2011 at 12:35pm
Any idea what this 'other expenses' is? It went up disproportionately.
------------- Ramana Rao Ambore |
Posted By: Shadofax
Date Posted: 10/Nov/2011 at 3:19pm
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This one sounds interesting ... need to take a deeper look ------------- $ |
Posted By: ambore
Date Posted: 17/Nov/2011 at 11:31pm
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Surprised to see the stock is holding pretty good in Rs. 285-290 range. Usually it goes down to Rs. 264 when the market is bad.
------------- Ramana Rao Ambore |
Posted By: rapidriser
Date Posted: 17/Nov/2011 at 8:26am
It has been recommended on 15-Nov by a subscription based stock picking service. It should take another 2-3 weeks before the buying by subscribers is completed. ------------- When all else is lost, the future still remains. - Christian Nestell Bovée |
Posted By: ambore
Date Posted: 19/Nov/2011 at 4:40pm
Thank you, sir. I understand it now. It is really showing unusal strength for the last week. ------------- Ramana Rao Ambore |
Posted By: commnman
Date Posted: 30/Jan/2012 at 10:56am
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Q3/Fy-12 Results out...
Total Income up 32.2% to 55.18 Cr from 41.75 Cr. EBIDTA up 15.4% to 9.98 Cr from 8.65 Cr. Net Profit DOWN 17% to 4.01 Cr from 4.84 Cr. EBIDTA margin is 18.1% V/s 21.1% (SQ-11) and 20.7% (DQ-10) NET Pr margin is 7.3% V/s 9.4% (SQ-11) and 11.6% (DQ-10) Total Raw material costs as a %ge to Income is 37.1% V/s 37.2% (SQ-11) and 40.3% (DQ-10) Employee costs to Income is 16.2% V/s 16.9% (SQ-11) and 16% (DQ-10) Other expenses to Income is 28.7% V/s 24.8% (SQ-11) and 23% (DQ-10) Interest expense to EBIT is 16.9% V/s 16.1% (SQ-11) and 18.3% (DQ-10) Tax Rate is 36.1% V/s 32.3% (SQ-11) and 8% (DQ-10) Steep rise in other expenses (includes forex loss) affected EBIDTA. Steep rise in Tax incidence dented net profits. 9M/Fy-12 v/s 9M/Fy-11: Total Income up 22.9% to 151.77 Cr from 123.46 Cr (Fy/10-11: 169.67 Cr) EBIDTA up 24.4% to 31.78 Cr from 25.54 Cr (Fy/10-11: 36.57 Cr) Net Pr DOWN 3.1% to 14.11 Cr from 14.57 Cr (Fy/10-11: 21.69 Cr) Tax Rate 32.8% V/s 9.9% Reported Nine-Month EPS 12.81 V/s 13.23 (Fy/10-11: 19.7) - ------------- main toh aam aadmi hun... jo sunta hoon wohi sach maanta hoon |
Posted By: rapidriser
Date Posted: 31/Jan/2012 at 12:28pm
The concessional income tax ate on 100% EOUs came to an end on 31-Mar-2011. Many export firms are reporting good growth in turnover and PBT, but a lower PAT compared to last year due to this change. ------------- When all else is lost, the future still remains. - Christian Nestell Bovée |
Posted By: mk1k
Date Posted: 23/Apr/2012 at 6:30pm
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Hi Ambore,
Will the entry of Braun AG which is picking up stake in Ahlcon Parentals have a effect on this company? Think PolyMed won a case against Braun earlier |
Posted By: ambore
Date Posted: 23/Apr/2012 at 8:11pm
I don't know how to thank you for this piece of information. Probably, this is one of the reasons for increased interest in Polymed recently. It gives me more confidence on Polymed and the industry in general. As the market itself is expanding I don't think Polymed would be impacted anyway. Yes, Polymed won the case against Braun in Germany. For the benefit of the fellow members sharing the news excerpt from vccircle.com. The offer price from Braun should give us fair valuation of Polymed if we compare. I know it is strictly not an apple to apple comparision. -------------------------------------- March 22, 2012, 11:30 AM IST http://www.facebook.com/sharer.php?u=http%3A%2F%2Fwww.vccircle.com%2F500%2Fnews%2Fbraun-to-buy-majority-stake-in-ahlcon-parenterals-for-up-to-50m&t=Braun%20To%20Buy%20Majority%20Stake%20In%20Ahlcon%20Parenterals%20For%20Up%20To%20%2450M%20%7C%20VCCircle&src=sp - -
http://www.vccircle.com/500/news/braun-to-buy-majority-stake-in-ahlcon-parenterals-for-up-to-50m - Braun To Buy Majority Stake In Ahlcon Parenterals For Up To $50MBY TEAM VCC
Braun has valued Ahlcon at 23x its trailing EBITDA and over 57x its trailing net profit, as per VCCircle estimates. German healthcare products major B Braun is acquiring majority stake in public-listed formulations and healthcare consumables firm http://www.ahlconindia.com/index.php - Ahlcon Parenterals (India) Ltd in a deal valuing the company at Rs 331 crore ($65 million). Braun has come up with an open offer to buy 1.87 million shares comprising 26 per cent stake from the public at Rs 460 a piece. This is 36 per cent premium to the last-traded share price of Ahlcon before the deal was announced. Ahlcon scrip rose 5 per cent to hit the upper circuit for the day at Rs 355.5 a share on the BSE on Thursday in a flat Mumbai market. Ahlcon had revenues of Rs 78.65 crore, with net profit of Rs 5.77 crore for trailing four quarters ended December 31, 2011. In the same period, the firm had EBITDA of Rs 14.46 crore. This means Braun has valued Ahlcon at 23x its trailing EBITDA and over 57x its trailing net profit, as per VCCircle estimates. Delhi-based Ahlcon is a two-decade-old firm engaged in the business of parenterals and manufacturers life-saving intravenous fluids and medical disposals. According to its website, Ahlcon has an installed capacity of 30 million bottles per annum for large-volume parenterals besides 150 million vials of eye drops and injections – both in transparent and white opaque packs – as small volume parenterals. It has a manufacturing unit at Bhiwadi at Rajasthan. The promoter group, led by Bikramjit Ahluwalia, holds 70.9 per cent stake in the public-listed company. As per the share purchase agreement, Braun will acquire shares from the promoters and the public to pick up to 75 per cent stake in the company. If the open offer is not too successful and it manages to garner just about 4 per cent or less stake from the public, it would buy out the entire holding of the promoters. This means the promoters will sell out anywhere between 49 per cent and 70.9 per cent of their holding to Braun as a part of the transaction. Given this, Braun will pay the promoters anywhere between Rs 162 crore and Rs 235 crore. Therefore, in total, Braun could end up paying around Rs 250 crore ($50 million). ------------- Ramana Rao Ambore |
Posted By: mk1k
Date Posted: 23/Apr/2012 at 11:40am
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Hi Ambore,
Will share with you another piece of information which is a paid subscription report. Here goes Investment Concerns Rising costs with falling product prices: The company's primary raw materials are plastic granules and SS tubes. The former is a derivative of crude oil, which has seen a huge volatility in its prices in recent times. The latter is imported from Japan. The prices of raw materials have been rising. At the same time, the average realised price for the products has been on the decline. The company uses its R&D facility to come up with innovative and new products, which helps in earning higher margins initially. However, as the product matures in the market, the prices for the same come down. As a result, the company's margins remain in a narrow range. If costs outpace innovation, then margins may come under pressure. Labour issues:The company currently runs an assembly line of production in most of its manufacturing units. These are all labour intensive lines wherein the fitting and assembly of the products are done manually. In recent times, the supply of migrant labour from regions like Bihar and Uttar Pradesh has gone down. As a result, the company is facing labour shortage. The company plans to automatise its manufacturing facilities which would help in bringing down the need for labour. However, the gestation period for automatising a facility ranges between 3 to 4 years. At the same time, it is also capital intensive. Therefore, the benefits of automation would take time to come through. Failed derivative transactions: Polymed had entered into certain derivative transactions in 2008 to hedge against currency risks. However, these transactions were adversely priced and have in turn resulted in exchange losses for the company (maximum being in FY 2008). The company has 3 more deals pending under these transactions which would end by October 2012. As a result, exchange losses on account of these would continue to weigh over profitability till then. The company is no longer interested in entering similar contracts in the future. It is now hedging currency risks by booking forward contracts. The exchange risk on raw materials, which are primarily imported, is naturally hedged through the export sales. Global crisis: Polymed derives nearly 75% of its total revenues from export markets. Of this 45% is from Europe, which is currently gripped by a severe economic crisis. While the company has not seen any pressure on sales as of now, however, if the global crisis worsens, then it may see an adverse impact. It is important to note here that the company carries out an internal risk assessment for each of its customers. As such, it has very little exposure to the countries that are considered risky. Even the little exposure that it does have, it has put in measures like 100% advance payment, minimum order amount and quantity, etc. for customers in these regions. This would help to safeguard payments to some extent. However, if the crisis worsens, then the company may see an adverse impact on sales. |
Posted By: ambore
Date Posted: 24/Apr/2012 at 12:45pm
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mk1k, thank you for the information. I think we have discussed about the most of the issues/risks in this thread already. ------------- Ramana Rao Ambore |
Posted By: ambore
Date Posted: 12/Jun/2012 at 4:10pm
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Any reason why the stock is going up? ------------- Ramana Rao Ambore |
Posted By: Shadofax
Date Posted: 13/Jun/2012 at 2:56pm
I think this was from eqtm report  ------------- $ |
Posted By: ambore
Date Posted: 22/Aug/2012 at 12:13pm
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The stock is holding up pretty well. I think the profit was done in the last quarter due to other expenses from forex losses and removal of tax benefits from last year. I think it would see a decent uptrend once the forex uncertainity is over after Oct. ------------- Ramana Rao Ambore |
Posted By: vixie
Date Posted: 22/Aug/2012 at 12:29pm
| my understanding is this stock has some forex related pain only till Oct and thereafter they will be able to realize the windfall benefit of rupee depreciation besides of course no more forex loss. So it's a wait for 1 more qtr or two max. |
Posted By: ambore
Date Posted: 30/Aug/2012 at 4:55pm
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I could see a slow and steady accumulation on this c**ter. It went up from Rs. 263 to Rs. 310 in the last one month. ------------- Ramana Rao Ambore |